When IRS Instruction Booklets Get Dark
June 5, 2014
Sometimes IRS publications go to unexpected places:
Kidnapped child. You may be able to treat your child as meeting the residency test even if the child has been kidnapped. See Publication 501 for details.
This comes across awkwardly, to say the least. In response to a kidnapping, the best condolences the IRS can offer are that your son or daughter may still count as a qualifying child for exemption purposes. Quite the silver lining.
Publication 501, which explains filing statuses and exemptions, gives the details. Unfortunately, they just get more depressing:
Kidnapped child. You can treat your child as meeting the residency test even if the child has been kidnapped, but both of the following statements must be true.
1. The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family.
2. In the year the kidnapping occurred, the child lived with you for more than half of the part of the year before the date of the kidnapping.
This treatment applies for all years until the earliest of:
1. The year the child is returned,
2. The year there is a determination that the child is dead, or
3. The year the child would have reached age 18.
It is difficult to imagine that any legislator designing the exemptions system realized this section would have to be written. Publication 501 also has to handle the tax statuses of children who die, or children who were born and died in the same year, or stillborn children.
Even outside of these worst-case scenarios, Publication 501 handles a number of uncomfortably specific situations, like the details of custody arrangements after divorces. These scenarios show the troubling extent to which the IRS is required to adjudicate deeply personal matters.
Voters and legislators get to “think of the children” in the abstract, and pass rules to lower taxes on households with children. These tax provisions allow us to imagine happy families benefiting from the tax break.
The IRS has the unfortunate task of dealing with real life, where circumstances aren’t always as clean. It has to actually think of the children, even those who have complicated or difficult lives through no fault of their own. The IRS has to investigate these difficult circumstances – even if it means asking sensitive personal questions.
The problem with asking sensitive questions is that you’ll get some answers you wish you hadn’t heard. If the IRS booklets seem insensitive or tone-deaf, that is perhaps because taxes are insensitive and tone-deaf by nature. Attempts to legislate feelings through the tax code invariably fall flat. Taxes collectors are best at collecting taxes, not at distributing compassion.
It absolutely makes sense to want to help taxpayers who are providing for children. A direct way to do that is to lower their tax burdens. But these moments of intrusiveness are a price that we pay for getting our children involved in tax law.